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Should we really care about building business cycle coincident indexes!

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  • Alain Hecq

Abstract

Quite often, the goal of the game when developing new coincident indexes of the economic activity is the comparison with NBER turning points. Using Monte Carlo simulations, this note illustrates that for the USA, any random linear combination of the four coincident variables would do the job as good as other more complicated methods.

Suggested Citation

  • Alain Hecq, 2005. "Should we really care about building business cycle coincident indexes!," Applied Economics Letters, Taylor & Francis Journals, vol. 12(3), pages 141-144.
    • Handle: RePEc:taf:apeclt:v:12:y:2005:i:3:p:141-144
    DOI: 10.1080/1350485042000338608
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    References listed on IDEAS

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    1. Cubadda, Gianluca & Hecq, Alain, 2001. "On non-contemporaneous short-run co-movements," Economics Letters, Elsevier, vol. 73(3), pages 389-397, December.
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    1. Cubadda, Gianluca & Guardabascio, Barbara & Hecq, Alain, 2013. "A general to specific approach for constructing composite business cycle indicators," Economic Modelling, Elsevier, vol. 33(C), pages 367-374.

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